Lot Lines: Space limited for seasonal retailers

Halloween retailers seeking space in Oklahoma City for their seasonal stores have run into a bit of a scare as the abundance of space options afforded them in past years has significantly declined.

In the years after the recession, Halloween retailers enjoyed an abundance of space options thanks to increased vacancy. The stores landed some of the most high-profile locations in some of the area’s most trafficked power centers, such as the 240 Penn Plaza on Interstate 240 and the Quail Springs Marketplace on W. Memorial Road.

The area has seen such strong absorption over the past two years that these prime spaces are no longer available to seasonal retailers. As a result, these stores have migrated away from the large power centers and into neighborhood shopping centers, where there is still some vacancy, especially in areas like Northwest Expressway, south Oklahoma City and suburbs such as Yukon.

Even though space is limited, it has not slowed down these retailers. Halloween has become big business in the retail industry. The National Retail Federation reported this week that Halloween spending is expected to be about $6.9 billion this year. As a result, retailers like Spirit Halloween and the locally based Halloween Superstore have not scaled back their seasonal store openings. The stores have opened a combined 11 locations in the Oklahoma City area this year.

Retail property owners enjoy this time of year as Halloween and Christmas retailers boost their occupancies. Granted, it is a temporary boost, but a boost to their net operating incomes nonetheless. With the economy continuing to improve, it is expected that Christmas sales will result in big sales for retailers, setting the stage for an even better 2014.

The lack of space will likely be an issue for 2014 holiday retailers as vacancy is expected to decline further and new construction will be somewhat limited. There are a few sizable projects in the works and the outlet mall is continuing its expansion, but the market may not see a massive wave of new construction. Considering how volatile the retail market can become when there is uncertainty in the national economy, it may be good for the market to see a slower pace of construction so as not to risk overbuilding.

Darren Currin is an independent research analyst and consultant who specializes in Oklahoma City and Tulsa commercial real estate. He may be reached at (405) 476-0164 or dcurrin@cox.net.